ACP Termination Impacts Verizon Q2 Revenue

New York – Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported second-quarter 2024 results today with strong wireless service revenue, broadband subscriber growth, and continued momentum in its three financial priorities of wireless service revenue, consolidated adjusted EBITDA and free cash flow. The company remains on track to achieve its full-year 2024 financial guidance.

“The sequential and year over year improvements in the second quarter were a reflection of operational excellence and the moves we made to bring choice, value and control to our customers’ lives,” said Verizon Chairman and CEO Hans Vestberg. “Our industry-leading network serves as a catalyst for how our millions of customers live their lives, and serves as the backbone for new and emerging technologies. We continue to build and expand on our strengths and successes with new products and services, and we are confident that this upward momentum will position us for future growth.” 

For second-quarter 2024, Verizon reported earnings per share of $1.09, compared with earnings per share of $1.10 in second-quarter 2023. On an adjusted basis², excluding special items, EPS was $1.15 in second-quarter 2024, compared with adjusted EPS² of $1.21 in second-quarter 2023.

Second-quarter 2024 financial results reflected a pre-tax loss from special items of $355 million. This included the amortization of intangible assets related to Tracfone and other acquisitions of $219 million, and a $136 million charge associated with a mark-to-market adjustment for pension liabilities.

Consolidated results: Upward momentum in key areas

• Total consolidated operating revenue in second-quarter 2024 was $32.8 billion, up 0.6 percent from second-quarter 2023. This growth can be attributed to an increase in service and other revenue, offset by a decrease in wireless equipment revenue due to lower upgrade volumes.
• Total wireless service revenue¹ in second-quarter 2024 was $19.8 billion, a sequential increase of more than $250 million, and an increase of 3.5 percent year over year. This increase was driven primarily by growth of Consumer wireless service revenue.
• Cash flow from operations in first-half 2024 totaled $16.6 billion, down from $18.0 billion in first-half 2023. This decrease was due to higher cash taxes, and higher interest expense primarily related to a reduction in capitalized interest, as well as higher interest rates.
• Capital expenditures in first-half 2024 were $8.1 billion, compared to $10.1 billion in first-half 2023. The company has returned to historic levels of capital intensity.
• The company ended first-half 2024 with free cash flow² of $8.5 billion, up from $8.0 billion in first-half 2023.
• Consolidated net income for second-quarter 2024 was $4.7 billion, down from consolidated net income of $4.8 billion in second-quarter 2023, and consolidated adjusted EBITDA² was $12.3 billion, up from $12.0 billion in second-quarter 2023.
• Verizon’s total unsecured debt as of the end of second-quarter 2024 was $125.3 billion, a $3.1 billion decrease compared to first-quarter 2024, and $6.1 billion lower year over year. The company’s net unsecured debt² at the end of second-quarter 2024 was $122.8 billion. At the end of second-quarter 2024, Verizon’s ratio of unsecured debt to net income (LTM) was 10.7 times and net unsecured debt to consolidated adjusted EBITDA ratio² was 2.5 times.

Verizon Consumer: Revenue up, continued improvement in postpaid phone net additions

• Total Verizon Consumer revenue in second-quarter 2024 was $24.9 billion, an increase of 1.5 percent year over year as gains in service revenue were partially offset by declines in wireless equipment revenue.
• Wireless service revenue in second-quarter 2024 was $16.3 billion, up 3.7 percent year over year, driven by growth in Consumer wireless postpaid average revenue per account (ARPA) from pricing actions and continued fixed wireless adoption.
• Consumer wireless retail postpaid churn was 1.00 percent in second-quarter 2024, and wireless retail postpaid phone churn was 0.79 percent.
• In second-quarter 2024, Consumer reported 8,000 wireless retail postpaid phone net losses, compared with 136,000 wireless retail postpaid phone net losses in second-quarter 2023.
• Consumer wireless postpaid phone gross additions of approximately 1.8 million in second-quarter 2024 represented a 12.0 percent increase year over year. Excluding the contribution from the company’s second number offering, wireless postpaid phone gross additions grew approximately 5.0 percent year over year.
• Consumer reported 624,000 wireless retail prepaid net losses in second-quarter 2024. This result included 410,000 wireless retail prepaid net losses related to the shutdown of the Affordable Connectivity Program, the majority of which were in SafeLink Wireless, Verizon’s brand offering access to government-sponsored connectivity benefits and programs. Wireless retail prepaid net losses, excluding SafeLink, were 12,000.
• Consumer reported 218,000 fixed wireless net additions and 24,000 Fios Internet net additions in second-quarter 2024. Consumer Fios revenue was $2.9 billion in second-quarter 2024.
• In second-quarter 2024, Consumer operating income was $7.6 billion, an increase of 3.7 percent year over year, and segment operating income margin was 30.5 percent, an increase from 29.8 percent in second-quarter 2023. Segment EBITDA² in second-quarter 2024 was $11.0 billion, an increase of 4.0 percent year over year. This improvement can be attributed to service revenue growth and lower upgrade volumes. Segment EBITDA margin² in second-quarter 2024 was 44.1 percent, an increase from 43.1 percent in second-quarter 2023.

Verizon Business: Strong mobility and broadband growth

• Total Verizon Business revenue was $7.3 billion in second-quarter 2024, a decrease of 2.4 percent year over year, as increases in wireless service revenue were more than offset by decreases in wireline revenue.
• Business wireless service revenue in second-quarter 2024 was $3.4 billion, an increase of 2.4 percent year over year. This result was driven by continued strong net additions for both mobility and fixed wireless, as well as benefits from pricing actions implemented in recent quarters.
• Business reported 268,000 wireless retail postpaid net additions in second-quarter 2024. This included 156,000 postpaid phone net additions, the highest result since fourth-quarter 2022. The company experienced sequential improvement in phone net additions across its small and medium business, enterprise, and public sector customers.
• Business wireless retail postpaid churn was 1.45 percent in second-quarter 2024, and wireless retail postpaid phone churn was 1.10 percent.
• Business reported 160,000 fixed wireless net additions in second-quarter 2024, the highest quarterly result to date.
• In second-quarter 2024, Verizon Business operating income was $500 million, a decrease of 6.2 percent year over year, and segment operating income margin was 6.8 percent, a decrease from 7.1 percent in second-quarter 2023. Segment EBITDA² in second-quarter 2024 was $1.6 billion, a decrease of 3.5 percent year over year, driven by continued declines in wireline revenues. Segment EBITDA margin² in second-quarter 2024 was 21.6 percent, a decrease from 21.9 percent in second-quarter 2023.

Outlook and guidance: Verizon is on track to meet financial guidance

The company does not provide a reconciliation for any of the following adjusted (non-GAAP) forecasts because it cannot, without unreasonable effort, predict the special items that could arise, and the company is unable to address the probable significance of the unavailable information.  

For 2024, Verizon continues to expect the following:

• Total wireless service revenue growth¹ of 2.0 percent to 3.5 percent.
• Adjusted EBITDA growth² of 1.0 percent to 3.0 percent.
• Adjusted EPS² of $4.50 to $4.70.
• Capital expenditures between $17.0 billion and $17.5 billion.
• Adjusted effective income tax rate² in the range of 22.5 percent to 24.0 percent.

¹ Total wireless service revenue represents the sum of Consumer and Business segments.
² Non-GAAP financial measure. See the accompanying schedules and www.verizon.com/about/investors for reconciliations of non-GAAP financial measures cited in this document to most directly comparable financial measures under generally accepted accounting principles (GAAP).

Press Release